• Maintain BUY (TP: RM6.09). TIME’s FY23 revenue of RM1,591mn (+9.4% YoY) ssupported by higher contribution from Retail (+13.0% YoY), followed by Enterprise (+3.0% YoY) and Wholesale business (+4.0% YoY). In tandem, the group’s net profit surged by +>100% YoY. Excluding one-off nonrecurring revenue, TIME recorded core net profit of RM412mn (+1.7% YoY) which we deem in-line with ours and consensus expectations, accounting for 94% and 95% respectively. We anticipate further expansion in TIME's data business and revenue growth in cloud services, supported by a positive outlook for increased internet connectivity, which aligns with the advancement of technology both locally and globally. Maintain a BUY call on TIME with an unchanged TP of RM6.09 (WACC: 6.4%; g: 1.0%).

• Key highlights. In 4QFY23, TIME’s revenue recorded a single digit growth of +6.6% YoY, mainly attributed to higher Data revenue, which increased by +13.1% YoY. The group's net profit decreased by -13.1% YoY due to increased sales and acquisition costs, higher network costs, and elevated depreciation and amortisation expenses. On a QoQ basis, the top-line saw a +2.7% increase due to growth across all customer groups. Nevertheless, core net profit declined by -2.4% QoQ, primarily influenced by higher network costs and increased depreciation and amortisation expenses as the company persists in investing in network infrastructure and coverage.

• Earnings Revision. No change to our forecast.

• Outlook. Management has guided that the primary focus of the group currently includes expanding the network coverage to meet ongoing customer demand, as well as improving operational efficiency and innovation to provide the best products and services possible. Looking forward, we expect ongoing contributions from data and data center operations due to increased demand for data. The growing digitalisation across various industries is also driving up the need for data. Additionally, the excitement around AI is reaching its peak, and 2024 is expected to be a pivotal year for AI, which also relies heavily on data.

Source: BIMB Securities Research - 1 Mar 2024